IMO 2020/ MARPOL/ Low Sulphur

VANGUARD FUEL SURCHARGE (VFS)

Dear Valued Customer,

As we communicated in our earlier announcement on IMO 2020/MARPOL/Low Sulphur, the International Maritime Organization (IMO) has introduced regulations to limit Sulphur content in fuel oil used by the ocean carriers from 3.5% to 0.5% effective 1st of January 2020. The only exception to this are Emission Controlled Areas (ECA) where the allowed Sulphur content in fuel oil is limited to only 0.1%.

There are a number of methods the carriers can employ in order to comply with this legislation; all of which will increase their vessel operating costs, and each carrier will use their own cost calculation to pass it on. We fully support the initiative to improve the environment and limit the impact our industry has on the planet.

Accordingly, we will be introducing a new Vanguard Fuel Surcharge (VFS). The VFS will be calculated as a means for us simply to recover our actual cost through the derivation of a weighted average of the costs imposed by the carrier on each trade lane. We will be posting the detailed information of the port pairs in each of the trade lanes on our website.

Vanguard Logistics Services will be announcing the VFS effective date in line with the implementation of these additional fuel costs applied by the core carriers we utilize today, and we will communicate further in this regard.

As our carrier partners will begin fueling their vessels with low Sulphur fuel in advance of the IMO 2020 regulation’s effective date of January 1st, 2020, we expect to receive their specific Low Sulphur surcharge amounts before December this year. We will be circulating additional advisories as we learn more and expect to be implementing VFS by no later than December 1st, 2019.

VFS will be published on the 20th of every month and effective on the 1st of the following month. For all FMC lanes, we will announce any expected increase 30 days prior to the implementation.

We thank you for your ongoing support and we are here to answer any questions you may have on this topic.

Please refer to the additional links below or reach out to your local contacts should you have any questions or require any further information.

Kind regards,
Vanguard Logistics Services